The global combined heat and power installation market size was valued at USD 9.4 billion in 2019 and is expected to grow at a CAGR of 3.1% from 2020 to 2027. The shift in preference towards replacing conventional energy systems owing to operational cost and uninterrupted utility supply is expected to drive the market for CHP installations. Continuing demand for captive power generation coupled with consumer’s inclination towards sustainable energy will propel market growth. Growing apprehensions towards Greenhouse Gas (GHG) emissions in line with safety, improved reliability, and efficiency across co-generation systems will further support the product’s adoption. Besides, rapid investments towards renewable energy technologies to limit carbon emissions will drive the market for CHP installations.
Generally, the thermal power plants use only half of the heat to generate power, and the rest heat is exhaust through the flue gas, cooling towers, and other means. Through CHP or cogeneration, the surplus heat can be captured and used to generate electricity, which may increase the power plant's productivity to 80%. Strict government regulation to control carbon dioxide (CO2) gases into the atmosphere is expected to drive demand for CHP installations over the projected period.
Ample amount of natural gas supply tied with low pricing is expected to inspire the market positively. Natural gas is widely used as a fuel for combined heat and power systems as it is available abundantly in countries such as Qatar, Russia, Iran, and the United States. Natural gas-based systems are easy to install and are also cost-effective as compared to other fuel systems. Growing energy prices has led power generating utilities to implement effective ways to generate electricity while using fewer energy resources.
Additionally, awareness related to energy conservation measures and energy efficiency is growing in developed as well as emerging economies. These factors are likely to enhance the growth of the market for combined heat and power installation in the projected period. The high initial installation costs of a CHP system is expected to hinder market growth over the forecast period. CHP systems are costlier in comparison to conventional systems such as boilers and diesel generators. These systems also take longer payback periods which actually depend upon the frequent usage of the system.
The large-scale type segment accounted for a revenue share of 79.5% in 2019. This product finds its major application in the commercial and industrial sectors. Global large scale-based combined heat and power installation system dominated the total demand for large-scale CHP installation in 2019. Growing demand for energy from large-scale industries such as chemical, cement, pulp, and paper, textiles, refining, pharmaceuticals, glass, and sugar is expected to drive the demand for large scale-based systems. They are used in these aforementioned industries owing to their size and high temperature and pressure requirement characteristics. The small-scale segment accounted for a revenue share of over 20.0% in 2019 and is expected to witness significant growth rates of 5.5% from 2020 to 2027.
Increasing demand for clean energy from residential sectors is expected to drive the market for CHP installations. Increasing awareness regarding the benefits of installing cogeneration systems is imperative for the CHP installation industry, as they are continuously favored compared to conventional methods. Major markets include countries such as U.S., Germany, and Japan. For residential applications, these systems are mainly deployed for wastewater treatment purposes. These systems are also used for commercial applications such as office buildings, hospitals, casinos, airports, and military bases. They are best put to use where buildings have “heat-sinks” such as swimming pools.
Natural gas-based CHP systems are expected to account for 66.0% of the market share in terms of revenue by 2027. Natural gas fuel-based CHP systems dominated the overall Combined Heat and Power (CHP) installations market and accounted for over 65.0% of the overall volume in 2019. Abundant availability and low pricing of natural gas make it an ideal fuel for use in CHP systems. Besides, natural gas is perceived as a clean source of energy that helps in curbing carbon emissions. Coal-based combined heat and power systems accounted for more than 18.0% of the total volume in 2019 and are likely to observe less than average growth rate over the projected period. Increasing coal demand owing to its high calorific value and low cost is expected to drive its demand for CHP systems.
Its high handling costs and release of harmful gases into the atmosphere restricts its usage into the designs. Biomass includes biofuels based on vegetable oils and animal fats, which are renewable and environmentally friendly. Biomass is mainly used as fuels for small scale CHP systems and projected to witness high growth rates as they help to decrease harmful environmental gases and attain government targets of using renewable sources of energy. Other fuel types include wood, processed waste, and oil. Wood waste is used in applications to run small scale CHP systems, and therefore, is used in residential and commercial applications. The processed waste heat generated from industrial plants is used in CHP systems for generating electricity and thermal energy. Oil powered CHP systems are easy to install and are energy efficient.
Combined cycle technology-based CHP systems accounted for more than 55.0% of the total volume in 2019. The combined cycle system was the dominant technology in 2019 with a market evaluation of over 6 billion. These systems are used for application where energy requirement is high predominantly for industrial sectors such as refining, chemicals, cement, paper, pulp, sugar, and pharmaceuticals.
The key advantages taken into consideration are non-fuel operating, low installation and maintenance cost, thermal output, start-up time, fuel availability, low emission, and energy-efficient when compared to other technologies. In this technology, energy from one turbine is passed to another making it more efficient delivering low-and-high pressure steam according to the requirement of the site. These systems are built according to client requirements. This factor will lead to the domination of combined cycle power technology in the upcoming years.
Steam turbine-based technology accounted for over 26.0% of the total volume in 2019 and is expected to exhibit moderate growth rates over the forecast period. Combined cycle-based technology amounted to over USD 4.7 billion in 2019 and is expected to witness higher growth rates with an estimated CAGR of 2.9% from 2020 to 2027. Other technologies used in the market for CHP installations include combustion/gas turbine, waste heat recovery, fuel cell, and microturbine. The other technologies of CHP include microturbines, fuel cells, and waste heat recovery. Microturbines are small electricity generators with a capacity of 30 KW to 250 KW. A variety of fuels such as sour gas, natural gas, and other liquid fuels can be used. These systems are used for residential and commercial applications.
Europe accounted for the largest revenue share of more than 50.0% in 2019. The region is expected to continue its dominance in terms of revenue share over the forecast period. Stringent government regulations to curb pollution levels in countries such as Germany, the U.K., and France are expected to drive Europe’s demand for the installation of CHP systems. North America CHP installation demand was 110.5 GW in 2019 and is expected to reach 142.9 GW by 2027, growing at an estimated CAGR of 3.3% from 2020 to 2027. Stringent environmental regulations from governing bodies, such as the U.S. EPA to control carbon emissions into the atmosphere are expected to drive the region's demand for CHP installation.
Asia Pacific region was accounted for over 27.0% in 2019 and is expected to witness significant growth rates with an estimated CAGR of over 4.3% from 2020 to 2027. The existence of large scale manufactures in Asia Pacific countries such as India, China, South Korea, and Japan is expected to drive this region’s demand. The governing bodies of countries such as India and China are pledged towards a growing share of the clean energy mix to reduce the emission levels. Besides, the government in some of the Asia Pacific countries are also supporting combined heat and power installations through various policies and research and development initiatives. These factors will lead to the growth of the market for combined heat and power installations in the APAC region in the future.
The market for CHP installations is moderately consolidated. Companies are focusing on entering in strategic partnership for combined research and development efforts to launch better products in the market combined heat and power installations. Continuing technical developments coupled with growing investments across the R&D sector will certainly augment the market statistics combined heat and power installations. For instance, in April 2018, GE signed a supply agreement with GreenTech to source 21 Jenbacher gas engines for CHP generation in Russian agriculture, glass, food and beverage, and chemical processes industries. Some of the prominent players in the combined heat & power installation market include:
Mitsubishi Hitachi Power Systems, Ltd.
Bdr Thermea Group
Aegis Energy Services Inc.
Capstone Turbine Corporation
Elite Energy Systems, LLC
Doosan Fuel Cell America, Inc.
Market size value in 2020
USD 9.8 billion
Revenue forecast in 2027
USD 12.0 billion
CAGR of 3.1% from 2020 to 2027
Base year for estimation
2016 - 2018
2020 - 2027
Revenue in USD billion and CAGR from 2020 to 2027
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Type, fuel, technology, region
North America; Europe; Asia Pacific; RoW
The U.S.; Canada; Mexico; The U.K.; Germany; Spain; Poland; Netherlands; France; Russia; Italy; China; India; Japan; South Korea; Taiwan
Key companies profiled
E.ON SE; Mitsubishi Hitachi Power Systems, Ltd.; Siemens; Centrica; General Electric; Bdr Thermea Group; Aegis Energy Services Inc.; Clarke Energy; Cummins Inc.; Capstone Turbine Corporation; Caterpillar; Elite Energy Systems, LLC; Doosan Fuel Cell America, Inc.; Tecogen Inc.; Wartsila
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This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. Grand View Research has segmented the global combined heat & power installation market report on the basis of product, fuel, technology, and region:
Type Outlook (Volume, GW; Revenue, USD Billion, 2016 - 2027)
Fuel Outlook (Volume, GW; Revenue, USD Billion, 2016 - 2027)
Technology Outlook (Volume, GW; Revenue, USD Billion, 2016 - 2027)
Regional Outlook (Volume, GW; Revenue, USD Billion, 2016 - 2027)
Rest of World (RoW)
b. The global Combined Heat and Power Installation Market size was estimated at USD 9.42 Billion in 2019 and is expected to reach USD 9.75 Billion in 2020.
b. The global combined heat and power installation market is expected to grow at a compounded annual growth rate of 3.07% from 2020 to 2027 to reach USD 12.00 Billion by 2027.
b. Asia Pacific dominated the combined heat and power installation market with the highest share of 27.25% in 2019. Shifting preference towards replacing conventional energy systems owing to operational cost and uninterrupted utility supply is expected to drive market growth.
b. Some key players operating in the combined heat and power installation market include E.ON SE, Mitsubishi Hitachi Power Systems, Ltd., Siemens, Centrica, General Electric, Bdr Thermea Group, Aegis Energy Services Inc., Clarke Energy, Cummins Inc., Capstone Turbine Corporation, Caterpillar, Elite Energy Systems, LLC, Doosan Fuel Cell America, Inc., Tecogen Inc., Wartsila among others.
b. Key factors driving the growing energy prices has led power generating utilities to implement effective ways to generate electricity while using fewer energy resources.
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